Their Islamic identity to organise their collective life in accordance

www.muftitaqiusmani.com
‘The separate assets should not be joined together nor the joint assets should be separated in order to reduce the amount of Zakah levied on them.

This principle of ‘Khultah-al-Shuyu’’ which is also accepted to some extent by the Maliki and Hanbali schools with some variance in details, has a basic concept of a juridical person underlying it. It is not the individual, according to this principle, who is liable to Zakah. It is the ‘joint-stock’ which has been made subject to the levy. It means that the ‘joint-stock’ has been treated a separate entity, and the obligation of ‘zakah has been diverted towards this entity which is very close to the concept of a ‘juridical person’, though it is not exactly the same.

Inheritance under Debt

The fourth example is the property left by a deceased person whose liabilities exceed the value of all the property left by him. For the purpose of brevity we can refer to it as ‘inheritance under debt’.
According to the jurists, this property is neither owned by the deceased, because he is no more alive, nor is it owned by his heirs, for the debts on the deceased have a preferential right over the property as compared to the rights of the heirs. It is not even owned by the creditors, because the settlement has not yet taken place.
~å áåíêçÇìÅíáçå íç áëä~ãáÅ Ñáå~åÅÉ

They have their claims over it, but it is not their property unless it is actually divided between them. Being property of nobody, it has its own existence and it can be termed a legal entity. The heirs of the deceased or his nominated executor will look after the property as managers, but they are not the owners. If the process of the settlement of debt requires some expenses, the same will be met by the property itself.

Looked at from this angle, this ‘inheritance under debt’ has its
own entity which may sell and purchase, becomes debtor and creditor, and has the characteristics very much similar to those of a
‘juridical person.’ Not only this, the liability of this ‘juridical
person’ is certainly limited to its existing assets. If the assets do not suffice to settle all the debts, there is no remedy left with its creditors to sue anybody, including the heirs of the deceased, for the rest of their claims.